The Federal Home Loan and Mortgage Corporation, a government sponsored enterprise(GSE) and publicly held company, gives every sign of being on its way into bankruptcy either this week or some time next week, having fallen 50% over the last day of trading, 24% the day before, and dropping from $60.85 a year ago to $7.72 as I write this tidbit of a diary.
This company along with Fannie Mae have bought 80% of U.S. mortgages since the credit freeze started last fall and currently needs to raise $29 billion to continue operations. That, my friends, is going to come out of your wallet and mine, courtesy of the pickpockets of the 110th Congress ...
If you want the background on this sucker I wrote it up yesterday:
Basically what we're about to see here will be a total, complete freeze up of the mortgage market in the United States and probably there will be runs on banks well in excess of the $51 billion the FDIC has available to cover such troubles. The Brits saw this a short while ago with the Northern Rock fiasco; the only reason it hasn't already happened here is that we live on credit cards - the soaring default rate has been a curious sort of de facto bank run for the U.S. as a nation.
Look for our ol' friend Helicopter Ben Bernanke to get some magical new enforcement powers that extend to commercial as well as investment banks:
OK, sorry for being all brief and disorganized and whatnot, but I have to go pick up the lil' woman and then we're off to get ready for our evening of entertainment. I think it's quite apropos, too - we're going to see Widespread Panic play in Boston ...